What is sequestration?

Sequestration | Guide

If you can’t afford to repay your unsecured debts in a reasonable amount of time, sequestration (the name for bankruptcy in Scotland) may be the most suitable debt solution for you.

With sequestration, you’ll only have to make payments towards your debts if you can afford to. These payments will take into account your essential living costs, ensuring you can still pay for things such as your rent, mortgage, food, utilities and travel costs. These payments can continue for up to four years. You’ll usually be discharged after 12 months and whatever debt you can’t afford to repay, that is included in your sequestration, will be written off.

Sequestration can be seen as a 'last resort', as it does have some serious financial consequences, such as the negative effect it will have on your credit rating; the fact that you might be forced to sell any valuable assets you own (including your home) to pay towards what you owe; and the impact it can have on your employment prospects.

However, in some circumstances, if you're dealing with problem debts, entering sequestration could be the best way to face up to your money problems and start working towards debt free future. By speaking to an expert, such as ourselves, about your personal circumstances, we’ll be able to advise if it’s the most suitable solution for you.

Next: What are the benefits and consequences of entering sequestration?

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